You want to buy a car and have to finance $25,000. The loan will be fully amortized over 5 years and the nominal interest rate will be 5% with interest and payments paid monthly. What will be the monthly loan payment?
When you apply for a credit card, you read that the annual interest rate is 18%. However, the fine print at the bottom of your monthly statement says that the interest compounds daily. What is the effective interest rate (the real rate you are paying)?
You parents will retire in 25 years. They currently have $75,000, and they think they will need $300,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds?